Emma Thomson: Time to rethink protection policy design?

Thomson-Emma-2013-MM-Peach-700.jpg

A friend and well-respected industry figure recently told me that, when insurers design their protection propositions, the proper place to begin is with the claims experience and work backwards.

Of course, this does not guarantee a perfect outcome but it makes sense. We are in the business of paying claims: helping people make a claim when the worst happens and then paying that claim as quickly and easily as possible. Perhaps if all insurers did this we might have simpler terms and conditions, and journeys that put more people in a position to claim if they need to.

Do I believe products are complicated to buy? Not really. A controversial opinion, perhaps, for people who wave the simple products flag. Life cover is simple to buy, as is critical illness cover, and many income protection plans are pretty straightforward nowadays. Apathy is the real problem and simplicity will not solve that. We need to help more people understand why they need cover in the first place and then trust us to pay the claims.

I am not denying there is complexity but to buy a policy is, in itself, pretty simple. Where it becomes complex is buying the right policy. Lots of bells and whistles are often added, so it can be difficult to ascertain what is the best option.This is why getting good advice is so important, particularly when buying critical illness or income protection plans.

After the conversation with my friend, I thought about the issues we have. I bet most insurers tend to begin with working out how to attract business and what type of business they want (and do not want), rather than starting at the point of claim. New business sales will always be a sexier project than existing customer experiences.

If every insurer began with the claims journey and then designed what was needed to ensure a good claims and buying experience, it is doubtful we would have many critical illness definitions that no one is likely to claim on, or clauses that can easily cause  people to fall unintentionally into the over-insurance trap.

But would we have a facility to keep in regular touch with clients about their policies to ensure they knew what they could claim on? Yep. Would we have an easy trust process so proceeds can be paid to beneficiaries as soon as the claim is agreed? You bet.

I have much admiration for those who work in claims. I know first-hand how tough it is helping claimants who are all in some way distressed, concerned and upset. Their amazing work is often under-promoted to advisers – a situation that needs to change. But perhaps they should also be more involved with new business as well, using their experience at the back-end to get the front-end better for all.

Emma Thomson is life office relationship director at LifeSearch